Cotton Market Bulls Making Their Move: Early Week Recovery Signals Shift

The cotton bulls are showing their strength as prices bounced back 30 to 35 points at the start of this trading week. After Monday’s pullback of 67 to 85 points across most contracts, the recovery suggests renewed buying interest in the commodity. This price action reflects broader market dynamics as traders reassess their positions heading into the latter part of winter.

Price Recovery Gains Momentum as Market Adjusts

The bounce-back in cotton futures indicates bulls are actively defending support levels established during Monday’s sell-off. Crude oil futures declined 24 cents per barrel, settling at $60.83, while the US dollar index weakened by another $0.539 to $96.865. These currency and energy market movements provide important context for cotton price movements, as both typically influence demand for agricultural commodities.

Export Sales Data Reveals Ongoing Concerns

USDA Export Sales commitments told a more cautious story for the broader market narrative. As of January 15, cotton commitments reached 7.35 million running bales, representing a 13% decline compared to the same period last year. More concerning for market bulls, actual sales were tracking at just 64% of USDA’s projection and lagged the 81% historical average pace. This data point suggests that despite near-term price recovery, underlying demand concerns continue to weigh on the market’s medium-term outlook.

Auction Data and Global Index Trends

The Seam’s Friday online auction reflected modest activity, with sales at 57.99 cents per pound on 5,645 bales. The Cotlook A Index declined 50 points to 74.05 cents, signaling weakness in global cotton pricing. ICE certified cotton stocks fell by 510 bales, bringing total certified inventory to 9,912 bales. The Adjusted World Price was updated at 50.99 cents per pound, down 18 points from the previous week—underscoring the mixed signals between spot markets and futures rallies.

Futures Contracts Show Varied Performance in Bulls Push

Cotton futures across the March, May, and July delivery months demonstrated modest gains despite earlier weakness. March 26 Cotton closed down 84 points at 62.97 but recovered 33 points into the new week. May 26 Cotton ended down 80 points at 64.68 and gained 31 points during the recent recovery. July 26 Cotton finished down 67 points at 66.30 with 31 points of gains, indicating that bulls are making incremental progress across the entire curve. The consistency of recovery across multiple contracts suggests genuine buying interest rather than isolated strength in any single delivery month.

Market participants watching cotton Bulls looking to establish positions are finding technical levels worth monitoring, particularly as global inventory data and export commitments continue to shape the fundamental backdrop for price discovery in coming weeks.